The controller for Dohini Manufacturing Company felt that the number of purchase orders alone did not explain
Question:
The controller for Dohini Manufacturing Company felt that the number of purchase orders alone did not explain the monthly purchasing cost. He knew that nonstandard orders (for example, one requiring an overseas supplier) took more time and effort. He collected data on the number of nonstandard orders for the past 12 months and added that information to the data on purchasing cost and number of purchase orders.n
Required:
1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate.
2. 1 McGarvey Manufacturing Company estimates that next month will have 450 total purchase orders and a2 nor standard orders, what is the total eitimated purchasing cost for that month.
3. What if McGarvey Manufacturing wants to estimate purchasing cost for the coming year and expects 0,100 purchase orders and 6:00 an standard orders .
4. What will estimated total purchasing cost bez (Round your answer to the nearest dollar.)
5. What is the total fixed purchasing cost? Why doesn't it equal the fixed cost calculated in Requirement 2 above?
Accounting What the Numbers Mean
ISBN: 978-1259535314
11th edition
Authors: David Marshall, Wayne McManus, Daniel Viele